SOCIAL REFORMS AND ECONOMIC DEVELOPMENT IN

SOUTH INDIAN STATES

By

G.T. Manjula
School of Economics and Management
South West Jiao Tong University
111, 1st Section, Northern Second Ring Road,
Chengdu, Sichuan 610031
China

Telephone: 00-86-13981925832
Email:amul27@hotmail.com

Affiliations: Bachelors of Engineering in Electronics, Bangalore University

Master of Business Administration, Webster University of America
Pursuing PhD in Finance, South West Jiao Tong University

1
 Abstract

This paper attempts to explore the mechanism of the effect of investment on the operation
of social reforms and their impact on the economic development of southern states of
India. Though the process through which social reforms impact development are many
and complex, this paper analyses some of the processes in terms of their nature,
operation and how they contribute towards faster growth of GSDP and their influence on
the economic development for the existing infrastructure, government policies and
investment in those states. Data for GSDP and NSDP of the states of India have been
collected and pictorially depicted to show the profound effect of social reforms on the
performance of southern states in terms of institutional reforms which show a positive
trend over a long period of time.

Key words: NSDP, GSDP, economic reforms

2
1. Introduction.

Economists have tried to identify factors which have been responsible for
the differences in the growth performance of major states in the Indian Union. Some have
identified investment climate, some others have identified quality of governance,
infrastructure and availability of human capital as major factors which attract investment
and ultimately result in varying rates of growth of GSDP. (Paul and Sridhar, 2009). Some
of the recent studies, (Ahluwalia, 2000), have compared the growth performance of major
states before and after the introduction of economic liberalization and economic reforms
and have attributed economic reforms as contributory factor for impressive growth rates
of GSDP of major states. But no attempt has been made to study and understand the
impact of social reforms at least in southern states, where they have operated for almost a
century, on the growth performance of southern states. This paper attempts to understand
the mechanism of operation of social reforms and their impact on the economic
development of southern states. In order to understand the impact of social reforms on
economic development of southern states, we have to understand the nature of social
reforms which operated in those states.

2. Nature of Social Reform.

Generally speaking, social reforms encompass a whole gamut of societal as

well as governmental actions initiated for reducing and, in the long run, removing the
social inequalities originating from social institutions like religion, caste, and gender.
Social reforms also encompass policies and programmes initiated by both social
groups,(like religious organizations, caste associations), and governments, ( both
national and state), to reduce and minimize the negative impact of social institutions and
to use reformed and modernized social institutions to promote transformed social identity,
political participation and economic prosperity of all social groups. Social reforms
influence economic development by facilitating creation of required capacities among the
masses to participate in social, political and economic activities of a society in a
3
region/country. The processes through which social reforms impact economic
development are many and complex. An attempt is made here to explain some of these
processes.

3. Operating Processes of Social Reforms.

Social reforms minimize the social barriers and inequalities between
different sections of the society. Social reforms broaden the social, political and
economic horizon of hitherto suppressed people, (scheduled caste and scheduled tribe
people), neglected social groups, (traditional artisan caste people), and even inactive
sections of society like the dominant caste groups who consider modern education meant
for government jobs as unnecessary in the context of their wealth. Social reforms create a
sense of self-confidence and self-esteem among hitherto suppressed/neglected and even
inactive sections of the society to accept modern education and absorb other modern
ways of acquiring capacity to participate in broader social, political and economic
activities. Through these processes, social reforms ultimately create a broad based
demographic, educational, economic and technological resources in a region/country.

Such broadened demographic, educational, economic and technological base creates ‘the
law of large numbers’ which enables a society to throw up large number of skilled
persons, innovators, risk-takers, and entrepreneurs apart from the usual political leaders,
administrators, doctors and engineers. All of them in turn contribute in the long run to
faster economic development with given investment, infrastructure and government
policies. This is how social reforms impact economic development. The role of social
movements as a precursor to the growth of education and the spread of entrepreneurship
is borne out at the level of regions too (see Damodaran (2008)). Like TN, Kerala also had
seen strong social movements early in the 20th century that promoted greater awareness
and interest in education among the lower castes that had not received such opportunities
in the past. Andhra Pradesh and Karnataka that were part of the erstwhile Madras
Presidency had also witnessed a similar awakening and networking among their lower
caste groups. The “social capital” created through this process in the region may have laid

4
the foundation for more widespread education through institutions established by
communities and caste groups. The explosion of technical education in the south in the
1990s could also be traced to this phenomenon. There was hardly any comparable
development of educational institutions through non-governmental initiatives in the
northern states.

4. Social Reforms in South Indian States:

Social reforms in south India originated in movements against caste

hierarchy. Though such movements were inspired by the Pan Indian Bhakti movement
after the spread of Islam in India, in south India the British rule brought
in western education and created large number of remunerative jobs in the British
administrative set-up.. The Brahmins took advantage of these benefits of British rule and
dominated the British administration at all levels. This dominance became an eyesore for
the non-Brahmin communities. The demand for more specific reforms became vocal
after the first Census Report of 1881 was published. It revealed the dominance of
Brahmin community in modern education and government jobs. This lead to protests
from economically and socially dominant communities in the southern part of India
which demanded for a fair share in government jobs. Thus began the anti-Brahmin
movement. However, the seeds of social reforms were sown by the Census of 1901 and
1911 which revealed caste-wise education status and employment in administrative set-
up of former Madras Presidency. Realizing the educational backwardness of people of
non-Brahmin castes, individual caste associations were formed to help their caste people
to acquire modern education. This was a positive response from neglected and inactive
social groups to Brahmin dominance. They started their own schools and demanded
reservations for jobs in government administrative set-up.

5
The Madras Dravidian Association (1912) played prominent role in these movements.
These efforts spread to former Mysore and Travancore states. Backward class movement
became a major political plank in south India. The governments of former Madras
Presidency, former Princely states of Mysore and Travancore opened government schools
for teaching subjects of western education. Later when the non-Brahmin movement got
transformed into backward class movement, they introduced reservations for modern
educated non-Brahmin caste candidates. (See Thimmaiah,1998).

Lasting social reforms were made possible by the Dravidian Movement

which was started by Periyar Ramaswamy Naykar after Independence. This movement
combined anti-Brahmin movement and backward class movement and on top of these it
preached self-respect for suppressed/neglected sections of the Tamil society. Though
Periyar did not join electoral politics, he supported those political parties which accepted
his ideas of social reforms. The earlier ant-
Brahmin movement lost its relevance after the death of Periyar. But the backward class
movement got further impetus all over south India. Periyar movement and the backward
class movement changed the entire political scene of south India. The earlier
suppressed/neglected caste groups acquired political power through electoral process.
They used their newly acquired political power to start their own educational institutions
and helped their caste people to acquire modern education at affordable cost. This spread
education widely among hitherto neglected sections of the society in southern states.
From mid-1970s politically and economically influential persons from non-Brahmin
castes/communities started their own professional colleges like Medical colleges,
Engineering colleges, Pharmacy colleges, Nursing colleges and Dental colleges and in
the mid-nineties they also started Business Management schools.

These privately owned professional colleges served the purpose of helping those
students who could not compete to gain admission purely on merit and they also enabled
them to mobilize enormous funds from donations/capitation fees. These professional
colleges helped all sections of the society to acquire professional education at affordable
cost and at the same time enabled the owners to mobilize capital from the aspiring
students in the form of capitation fee/ donation. They invested that capital in construction,
6
transport, trade and hotel industry which have expanded rapidly and thereby raising the
share of GSDP from service sector in the southern states. When at the national level
‘license and permit raj’ was operating for starting big manufacturing industries, at the state
level the resurgent backward caste groups were able to start professional educational
institutions with ease which offered professional courses and used the mobilized funds for
investment in service sector enterprise activities. Thus non-Brahmin private entrepreneurs
emerged slowly in southern states that were also encouraged by the state level political
leaders through mutual-benefit arrangements. The impact of this socio-political process on
the economic performance of southern states has been acknowledged by Samuel Paul and
Kala Seetharam Sridhar in their recent comparative study of growth performance of Uttar
Pradesh and Tamil Nadu. They have observed that:

“There is historical evidence to support the thesis that education in TN had benefited
from the helping hand of the British colonial government in the 19 th century. TN led the
country in the reservation policy in education that others emulated in later periods. More
importantly, the social movements that dominated TN politics and public discourse in the
early part of the 20th century created a much greater awareness among the lower castes
that constituted the majority of the population about their rights and the need for
collective action to claim their entitlements. Scholars who have documented social
movements across India have pointed out that similar movements did not occur in UP or
other northern states.1 In both regions, there were movements that protested caste abuses
and brahminical dominance. But the distinguishing feature of the TN social movements
was their focus on gaining access to education and economic opportunities such as jobs in
government. These movements not only created greater awareness among the backward
classes about the need for collective struggles to achieve their ends, but also increased
their sense of solidarity and mutual trust among the members, and helped them create
vast new networks to mobilize resources and launch collective political and social action
to achieve common ends. It was thus that large numbers of schools, colleges, and in
recent years engineering colleges were set up by caste and community supported leaders
and groups. A similar trend has been noted in the industry sector of TN where again,
impressive numbers of small and medium enterprises have been set up by entrepreneurs,
1

7
who took advantage of their caste and community networks. The governments in power
facilitated this process, resulting in a groundswell of private sector development. Among
the political leaders who promoted this process were K. Kamaraj, R. Venkataraman,
Annadorai and C. Subramaniam. Developments of this kind do not seem to have
occurred in UP. The importance of these historical factors, especially social movements,
in laying the foundation for strengthening both the demand and supply sides of
development in TN cannot be overemphasized”. (P.)

They have further observed that:

“The role of social movements as a precursor to the growth of education and the spread
of entrepreneurship is borne out at the level of regions too (see Damodaran (2008)). Like
TN, Kerala also had seen strong social movements early in the 20 th century that promoted
greater awareness and interest in education among the lower castes that had not received
such opportunities in the past. Andhra Pradesh and Karnataka that were part of the
erstwhile Madras Presidency had also witnessed a similar awakening and networking
among their lower caste groups. The “social capital” created through this process in the
region may have laid the foundation for more widespread education through institutions
established by communities and caste groups. The explosion of technical education in the
south in the 1990s could also be traced to this phenomenon. There was hardly any
comparable development of educational institutions through non-governmental initiatives
in the northern states”. (P.)

5. Impact of Social Reforms on Economic Performance of Southern

States

Attractive invest opportunities and conducive investment climate might have contributed
for the faster growth of GSDP of southern states after economic reforms. But these are of
recent origin. Much debated quality of governance is an unstable factor in these states.
Though infrastructure facilities do matter in attracting private investment, they have not
been uniformly favorable in all these southern states. But still their growth rates have
been consistently higher than national average and compared to many other major states.

8
What explains this difference? The difference can be explained by the expansion of
education across all sections of the society which created broader human capital base.
Again, socially broad based private sector used professional education institutions to
mobilize capital for investment in service sector activities. Socially broad based private
sector in southern states used the benefits of liberalization and economic reforms for
expanding the service sector enterprise activities enormously. This expansion of service
sector increased the share of GSDP/NSDP from service sector in southern states beyond
50 per cent which got reflected in faster growth of GSDP of southern states. This may be
observed from Tables 1 and 2 below:

Table 1: State-wise Percentage Share of Service Sector in GSDP:

9
State 1980-81 1985-86 1990-91 1995-96 2000-01 2005-06 2006-07 2007-08 2008-09
Andhra Pradesh 37.04 39.41 41.19 43.14 47.10 50.26 50.75 - -
Assam 39.89 42.09 44.73 39.33 48.12 49.64 51.50 - -
Bihar 27.65 28.23 30.48 43.96 50.48 56.10 55.25 57.63 -
Chhattisgarh - - - 31.41 41.89 38.17 38.80 40.86 -
Gujarat 32.31 35.81 37.24 37.23 44.73 41.51 - - -
Haryana 26.77 28.67 30.71 32.28 41.57 47.04 47.66 - -
Himachal Pradesh 33.08 35.85 37.75 37.54 38.62 38.10 38.50 - -
Jammu & Kashmir - - - 45.82 46.61 46.28 45.89 45.88
Jharkhand - - - 28.15 41.88 35.74 35.83 - -
Karnataka 33.56 37.80 41.18 40.83 47.58 53.49 54.80 55.72 -
Kerala 38.14 42.29 44.81 49.18 57.23 60.28 60.60 - -
Madhya Pradesh 26.83 29.44 30.42 36.17 50.65 49.38 50.05 - -
Maharashtra 37.23 41.81 42.32 47.91 57.15 60.58 - - -
Orissa 30.28 31.97 37.51 36.92 46.55 47.60 46.91 - -
Punjab 30.86 27.96 28.77 32.93 40.27 42.36 42.13 - -
Rajasthan 34.46 30.79 32.77 37.32 43.79 42.76 43.42 43.63 -
Tamil Nadu 40.66 42.82 43.27 42.86 52.83 57.84 58.35 - -
Uttar Pradesh 32.77 34.45 36.82 38.27 43.42 45.18 45.20 - -
Uttarakhand - - - 36.54 49.96 48.93 48.29 - -
West Bengal 38.75 40.49 41.54 44.13 52.89 54.38 - - -
Arunachal Pradesh 31.01 28.07 33.13 30.29 46.59 42.37 - - -
Manipur 43.38 47.04 51.09 47.27 48.81 37.28 35.96 - -
Meghalaya 43.86 49.00 53.44 53.66 52.99 52.65 52.38 52.74 -
Mizoram - - - - 63.59 63.32 63.42 63.52 63.20
Nagaland 54.24 48.80 45.69 56.11 56.16 52.17 - - -
Sikkim 30.40 33.57 39.40 44.90 55.18 52.55 52.07 - -
Tripura 37.47 45.01 50.12 53.98 53.15 55.09 - - -
Delhi 70.72 69.33 68.09 76.36 77.07 77.10 - - -
Goa 45.87 53.01 51.82 54.76 47.02 49.80 48.89 - -
Andaman & 26.98 29.55 32.66 37.60 55.37 52.99 - - -
Nicobar Islands
Pondicherry 27.12 28.35 29.75 53.66 45.42 47.83 46.55 45.16 -
Source: Economic and Political Weekly Research Foundation, 2009.

Table 2: State-wise Percentage Share of Service Sector in NSDP

State 1960- 1965- 1970- 1975- 1980- 1985- 1990- 1995- 2000- 2005-06 2006- 2007-
61 66 71 76 81 86 91 96 01 07 08
Andhra - - 29.40 30.96 36.77 41.05 41.55 42.69 48.36 51.29 51.80 -
Pradesh
Assam 24.08 27.36 22.12 22.34 40.39 32.96 32.13 37.57 47.39 47.35 46.83 -
Bihar 31.38 29.36 20.41 21.60 27.43 28.03 28.90 34.24 50.64 57.37 57.92 60.31
Chhattisgarh - - - - - - - - 46.09 38.51 38.60 39.86
Gujarat 32.45 33.26 30.26 33.16 31.95 36.55 35.77 35.16 47.36 41.87 - -
Haryana 20.94 21.67 20.01 24.59 26.42 30.22 31.34 33.27 42.44 47.29 47.27 -
Himachal - - 24.71 25.99 30.96 33.56 37.15 37.22 38.02 36.54 37.86 -
Pradesh
Jammu & 23.61 26.17 28.80 30.55 39.70 42.12 43.50 46.72 46.65 44.05 44.19 43.87
Kashmir

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 Jharkhand - - - - - - - - 44.66 35.51 35.34 -
Karnataka 23.58 24.46 22.17 22.95 33.18 37.26 39.86 41.35 50.12 55.88 56.72 57.05
Kerala 28.78 29.61 34.24 35.45 36.40 39.82 40.74 39.38 60.55 62.25 62.25 -
Madhya 23.11 25.31 26.01 30.24 31.53 31.74 51.04 48.54 48.28 -
Pradesh
Maharashtra 31.74 35.71 37.19 36.12 36.80 40.75 43.01 46.28 59.41 61.40 - -
Orissa - - 22.34 23.35 29.22 30.01 34.54 36.11 48.89 47.68 46.06 -
Punjab 30.37 30.40 26.32 28.67 32.02 33.90 32.97 33.96 41.38 45.15 44.06 -
Rajasthan 27.21 28.01 25.53 28.87 29.71 31.79 33.02 39.32 46.08 45.64 45.24 -
Tamil Nadu 30.42 34.00 34.02 35.03 40.60 43.75 44.57 48.72 54.92 58.34 58.68 -
Uttar Pradesh - - 32.69 33.75 32.36 36.30 36.61 37.61 44.47 47.48 47.60 -
Uttarakhand - - - - 38.12 38.79 40.50 41.34 48.79 48.08 47.81 -
West Bengal 33.17 32.64 32.22 33.06 25.15 27.83 35.75 29.04 53.56 55.45 - -
Delhi 60.79 64.40 67.35 71.80 70.76 69.90 67.07 73.70 77.71 77.31 - -
Goa 42.59 43.44 41.79 51.36 47.85 54.49 52.00 43.08 42.02 -
Arunachal - - 20.48 21.43 30.51 27.37 35.36 33.54 45.28 39.62 - -
Pradesh
Manipur 34.04 35.32 35.20 31.25 43.25 41.38 48.96 51.19 48.82 41.98 41.99 41.80
Meghalaya - - - - 43.56 46.08 51.17 54.81 53.47 53.68 54.14 54.90
Mizoram - - - - 50.64 49.83 49.87 48.19 64.69 64.42 64.85 65.27
Nagaland - - - - 53.37 55.51 56.28 57.77 55.54 51.93 - -
Sikkim - - - - 30.30 32.59 40.54 34.31 54.92 48.88 47.80 -
Tripura 31.57 30.01 22.97 22.45 36.51 40.15 46.72 50.09 53.55 55.89 - -
Andaman & - - - - - - - - 54.65 51.31 - -
Nicobar
Islands
Chandigarh - - - - - - - - 84.47 84.17 - -
Pondicherry - - - - 26.46 34.22 39.72 57.53 46.24 49.70 48.98 48.68
Source: Economic and Political Weekly Research Foundation, 2009.
Thus it may be observed that the share of service sector in GSDP/NSDP which was
hovering around one-third in 1970’s suddenly jumped during the 1980s in all the four
southern states. During 1990’s it reached around 50 per cent and in the last decade of the
last century it almost reached 60 per cent, except in Andhra Pradesh, which was higher
than the national average share. Such phenomenal increase was made possible by the
expansion of private sector share in educational services, trade, transport and health
services.
Table 3: E-Readiness of Indian States/UTs
Leaders Karnataka, Maharashtra, Tamil Nadu and Andhra Pradesh
Aspiring Leaders Gujarat, Goa, Delhi and Chhattisgarh
Expectants West Bengal, Uttar Pradesh and Kerala

Average Achievers Madhya Pradesh, Punjab, Pondicherry, Haryana and Rajasthan

Below Average Himachal Pradesh, Uttaranchal, Chhattisgarh, Orissa Mizoram,
Achievers Tripura, Meghalaya and A and N Islands
Least Achievers Assam, Jharkhand, Lakshadweep, Bihar, Jammu and Kashmir,
Sikkim, Arunachal Pradesh, Nagaland, Daman and Diu, Manipur
and D and N Haveli
Source: India: E-Readiness Assessment Report (2003)
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 Table 4: Categorization of the States/UTs in terms of E-Governance
Level 1 Karnataka, Andhra Pradesh, Tamil Nadu and Gujarat
Level 2 Himachal Pradesh, Uttar Pradesh, Rajasthan, Uttaranchal, Kerala,
Delhi, Madhya Pradesh, Maharashtra and Goa
Level 3 West Bengal, Punjab, Chandigarh and Haryana

Level 4 Tripura, Bihar, Assam, Pondicherry, Orissa, Chhattisgarh, Meghalaya,

A and N Islands
Level 5 Lakshadweep, Jammu and Kashmir, Arunachal Pradesh, Mizoram
and Sikkim
Level 6 D and N Haveli, Manipur, Daman and Diu, Nagaland and Jharkhand
Source: India: E-Readiness Assessment Report (2003)

5. Relation between Human Capital and Economic Development.

The relation between human capital and economic development has long been
discussed and debated. Economists have come to recognize and accept the contribution of
human capital to economic development in both developed and developing countries. In
the context of globalization and economic liberalization, the role of human capital has
come to be justifiably used as one of the determinants of interpersonal and interregional
economic inequalities. Human capital increases productivity through skill and innovation.
Increased productivity results in high growth rate of output. In India economists have
used it to explain development performance of states after economic reforms. For
example, Montek Singh Ahluwalia, has attempted to quantify the relation between human
capital and state level growth. He has observed:
“The quality of human resources, broadly defined to mean the educational attainment
and skill level of the labor force, is another factor that is generally regarded as a critical
determinant of growth. We should expect that states with superior availability of human
skills and more rapid growth in these skills are more likely to have higher per capita
GSDP and also experience faster growth. However, since data on the educational and
skill characteristics of the labor force are simply not available, the literacy rate of the

12
population is commonly used as a proxy for the quality of human resources.”(Ahluwalia,
2000)
Ahluwalia used regression analysis to quantify the contribution of human capital to state
GSDP. He found weak relation between growth rate of GSDP and literacy rate. However,
when used with investment rate he found significant result. He has observed:
“It could be argued that the role of human skills in promoting growth is not independent
of the level of investment and the two interact with each other to generate positive
responses. We therefore estimated a regression equation relating growth to a composite
variable obtained by multiplying each of the capex investment ratios with the literacy rate
in the base year of the post-reforms period. The multiplicative form implies that the
response of growth to a higher investment rate is greater the larger the literacy variable,
thus building in a positive interaction effect.”(2000).
Thus he has proved that there is significant impact of human capital (though represented
by proxy variable) on economic development at the state level in India. Human capital
has been formed on a wider scale in southern states over a long period of time thanks to
social reform movement which encompassed the suppressed/neglected sections which
created a broad base of English educated and skilled young population. This broad based
human capital has contributed at least partially for higher growth rates of GSDP of
southern states. But this is only a part of the story. A far more significant contribution has
been that social reforms not only created broad based human capital in the southern states
but also enabled suppressed/neglected caste groups to use their newly acquired political
clout to start professional educational institutions to raise interest free capital funds for
investment in service sector enterprises which in turn created jobs and added to GSDP
through service sector contribution. This I consider as a major economic impact of social
reforms on growth performance of southern states. Because of the difficulty in finding
relevant data to substantiate this, economists have sidelined this factor. Whatever
relevant data that are available are presented in Tables 3 to 8 to prove the point that social
reforms in southern states enabled the former suppressed and neglected caste groups to
acquire modern education and capture political power .They used both these to encourage
private enterprise professional education .The combined impact of these factors
unleashed unprecedented urge to prosper economically. This urge lead to the emergence
of broad based private enterprise in southern states. When the Congress government at
13
the centre led by P.V.Narasimha Rao introduced economic liberalization and encouraged
the process of globalization, the southern entrepreneurs jumped and exploited the new
economic opportunities thrown open by the economic reforms. The cumulative result of
these factors has enabled the southern states to outpace the growth performance of other
states in the Indian Union.

Table 5:
Literacy Rates of Major Indian States: 1961, 1991, 2001 and 2011
State 1961 1991 2001 2011
Total Total
M F P M F P
Andhra Pradesh 21.19 44.08 71 51 61 75.6 59.7 67.7
Assam 32.95 52.89 72 56 55 78.8 67.3 73.2
Bihar 21.95 37.49 60 34 48 73.5 53.3 63.8
Goa 35.41 75.51 89 76 82 92.8 81.8 87.4
Gujarat 31.47 61.29 81 59 70 87.2 70.7 79.3
Haryana NA 55.85 79 56 69 85.4 66.8 76.6
Jammu & Kashmir 12.95 NA 86 68 77 78.3 58 68.7
Karnataka 29.8 56.56 76 57 67 82.8 68.1 75.6
Kerala 55.08 89.91 94 88 91 96 92 93.9
Madhya Pradesh 21.41 44.67 77 50 64 80.5 60 70.6
Maharashtra 35.08 64.87 86 68 77 89.8 75.5 82.9
Orissa 21.66 49.09 76 51 64 82.4 64.4 73.5
Punjab NA 58.51 76 64 70 81.5 71.3 76.7
Rajasthan 18.72 38.55 76 44 61 80.5 52.7 67.1
Tamil Nadu 36.39 66.64 82 65 73 86.8 73.9 80.3
Uttar Pradesh 20.87 40.71 70 43 57 79.2 59.3 69.7
West Bengal 34.46 57.7 78 60 69 82.7 71.2 77.1
14
 India 28.3 52.27 76 54 65 82.1 65.5 74.04

Source: literacy-rate-in-indian-state-census-2011

Table 6:
Number of Professional Colleges in Major Indian States (2008)
State Engineering Business Medical Colleges for Pharmacy
Colleges Management Colleges Computer Colleges
Schools application
Courses
Andhra 431 263 36 126 62
Pradesh
Assam 33 9 3 13 2
Bihar 50 31 10 50 2
Goa 8 6 12 25 8
Gujarat 138 61 5 1 34
Haryana 105 64 4 32 25
Jammu and 32 14 52 9 NA
Kashmir
Karnataka 485 174 51 114 89
Kerala 117 45 1 69 32
Madhya 169 81 1 53 62
Pradesh
Maharashtra 536 264 7 85 102
Punjab 108 121 13 46 63
Rajasthan 90 66 13 46 63
Tamil Nadu 525 304 49 219 75
Uttar 24 146 23 82 56
Pradesh

15
West Bengal 124 120 15 75 11
Source: Ministry of Human resource development, Government of India.

Table 7:
Total Number of Arts, Science, Commerce, Teacher Training and
Professional Colleges in Major Indian States (2008)
STATE No. of All Types of
Colleges
Andhra Pradesh 2149
Assam 493
Bihar 211
Goa 54
Gujarat 845
Haryana 1225
Jammu & Kashmir 475
Karnataka 3287
Kerala 1231
Madhya Pradesh 1434
Maharashtra 3109
Orissa 988
Punjab 1344
Rajasthan 1723
Tamil Nadu 2876
Uttar Pradesh 2822
West Bengal 734
All India 26950
Source: Ministry of Human resource development, Government of India

16
TABLE 8 :GROWTH RATES IN STATE DOMESTIC PRODUCT UNDER
DIFERENT PLANS
8TH PLAN 9TH PLAN 10TH PLAN
(1992 - 1997) (1997 - 2002) (2002 - 2007)
North Haryana 5.2 4.1 7.9
Himachal Pradesh 6.5 5.9 8.9
Jammu and Kashmir 5.0 5.2 6.3
Punjab 4.7 4.4 6.4
Rajasthan 7.5 3.5 8.3
Uttar Pradesh 4.9 4.0 7.6
Uttaranchal N.A N.A 6.8
Chandigarh N.A 9.5 10.6
Delhi 4.3 9.4 10.6

West Gujarat 12.4 4.0 10.2

Madhya Pradesh 6.3 4.0 7.0
Maharashtra 8.9 4.7 7.4
Goa 8.9 5.5 9.2
Chhattisgarh N.A N.A 6.1

South Andhra Pradesh 5.4 4.6 6.8

Karnataka 6.2 7.2 10.1
Kerala 6.5 5.7 6.5
Tamil Nadu 7.0 6.3 8.0
Pondicherry 7.7 12.5 10.7

East Bihar 2.2 4.0 6.2

Jharkhand N.A N.A 6.9
Orissa 2.1 5.1 6.2
West Bengal 6.3 6.9 8.8
A and N Islands 10.3 3.7 6.6
Sikkim 5.3 8.3 7.9

North- East Assam 2.8 2.1 6.2

Manipur 4.6 6.4 6.5
Meghalaya 3.8 6.2 6.3
Nagaland 8.9 2.6 5.6
Tripura 6.6 7.4 7.3
Arunachal Pradesh 5.1 4.4 8.0
Mizoram N.A N.A 5.3

All India
6.7 5.5 8.0

Source: Planning Commission, Government of India

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Table 9:
Quinquennial Annual Compound Growth Rates of GSDP of Major-
States: 1980-85 to 2005-06 (%)
State 1980-81 1985-86 1990-91 1995-96 2000-01
to to to to to
1985-86 1990-91 1995-96 2000-01 2005-06
1980-81 Prices 1993-94 Prices 1999-00
Series
Andhra Pradesh 5.1 7.5 5.3 6 6.5
Assam 5.1 3.1 3.6 2.2 5.3
Bihar 5.2 4.4 -0.5 9.6 2.5
Delhi 7.2 7.7 8 10.3 7.4
Goa 1.7 9.6 6.1 9 7.1
Gujarat 4.8 5.8 7.7 4.4 10.1
Haryana 6.6 6.2 3.4 6.6 5.3
Himachal Pradesh 3.1 6.9 4.4 6.8 6.9
Jammu & Kashmir 3.8 2.9 4.9 4.4
Karnataka 4 6.3 6.3 8.6 5.8
Kerala 2.1 5.1 5.3 5 6.8
Madhya Pradesh 3.6 6.6 4.2 3.5 4.4
Maharashtra 4.5 7.6 8.1 3.9 7.1
Orissa 4 1.6 5.4 3 7.8
Punjab 5.9 4.6 4.6 5 4.2
Rajasthan 4.9 10 2.9 5.2 5
Tamil Nadu 5.7 5.6 5.9 6.3 4.9
Uttar Pradesh 4 4.7 6.6 7 6.3
West Bengal 4 4.7 6.6 7 6.3
All India 4.6 6.1 5.2 5.4 7
Source: Planning Commission, Government of India

Table 10.Quinquennial Annual Compound Growth Rates of Per Capita

GSDP of Major States: 1980-85 to 2005-06 (%)
State 1980-81 1985-86 1990-91 1995-96 2000-01 to
to 1985- to 1990- to 1995- to 2000- 2005-06
86 91 96 01
1980-81 Prices 1993-94 Prices 1999-2000
Series
Andhra Pradesh 2.8 5.2 3.4 4.9 5
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 Assam 3 0.8 1.4 0.7 3.9
Bihar 2.9 2.3 -2.6 6.8 0.6
Delhi 2.7 3.3 4.2 6.3 4.1
Goa 0 8.2 4.1 7.4 4.1
Gujarat 2.6 4 5.9 2.3 8.4
Haryana 4 3.7 1.2 3.9 5.2
Jammu & Kashmir 1.2 0.3 2.5 2.1 NA
Karnataka 1.8 4.4 4.7 7.2 4.8
Kerala 0.7 3.7 3.9 4.6 6.9
Madhya Pradesh 1.2 4 2.1 1.4 2.8
Maharashtra 2.3 2 2.8 3.9 8
Manipur 2.7 2 2.8 3.9 8
Orissa 2.2 -0.2 3.5 1.6 10.5
Punjab 4 2.6 2.6 3 2.2
Rajasthan 2 7.4 0.7 2.6 3.2
Tamil Nadu 4 4.3 4.8 5.3 4
Uttar Pradesh 1.6 3.7 0.6 1.5 2.1
West Bengal 1.8 2.3 4.8 5.4 5
All India 2.3 4 1.7 4.4 5.2
Source: Planning Commission, Government of India

Table 11:
Per Capita NSDP of major Indian States at Constant Price
1960-61 to 2006-07(Rupees)
State 1960- 1970- 1980- 1985- 1990- 1995- 2000-01 2006-07
61 to 71 to 81 86 91 96
1970- 1975-
71 76
1970-71 1980-81 1993-94 1999-2000 Series
Prices Prices Prices
Andhra NA 585 625 1380 1573 2060 16622 22835
Pradesh
Assam 251 535 559 1284 1510 1546 12447 15623
Bihar 215 402 409 917 1074 1197 6557 8056
Goa 0 915 1224 3145 3091 4883 38623 50565
Gujarat 362 829 818 1940 2186 2641 17227 27027
Haryana 327 877 938 2370 2893 3509 24328 35779
Jammu & 269 548 573 1776 1832 1784 13859 16817

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Kashmir
Karnataka 296 641 666 1520 1644 2039 37405 21931
Kerala 259 594 610 1508 1507 1815 19724 27284
Madhya NA 484 499 1358 1409 1696 11154 12577
Pradesh
Maharashtra 409 783 878 2435 2705 3483 21892 30750
Orissa 0 485 476 1314 1442 1383 10211 15096
Punjab 366 1070 1192 2674 3249 3730 25990 30158
Rajasthan 0 645 584 1222 1338 1942 12840 16401
Tamil Nadu 334 581 598 1498 1795 2237 20249 25898
Uttar Pradesh 0 486 474 1275 1375 1652 9700 11188
West Bengal 390 722 1125 1773 1929 2145 16185 21953
All India 1563 1742 2109 16172 22580
Source: Reserve Bank of India: Handbook of Statistics on Indian Economy 2009-10

Table 12:
Percentage of people below Poverty Line in Major Indian States
Rural Urban
State 1973-74 1993-94 1999-2000 1973-78 1993-94 1999-2000
Andhra Pradesh 48.41 15.92 11.05 50.61 38.33 26.63
Assam 52.67 45.01 40.04 36.92 7.73 7.47
Bihar 62.99 58.21 44.3 52.96 34.5 32.91
Gujarat 46.35 22.18 13.17 52.57 27.89 15.59
Haryana 34.23 28.02 8.27 40.18 16.38 9.99
Karnataka 55.14 29.88 17.38 52.53 40.14 25.25
Kerala 59.19 25.76 9.38 62.74 24.55 20.27
Madhya Pradesh 62.66 40.64 37.06 57.65 48.38 38.44
Maharashtra 57.71 37.93 23.72 43.87 35.15 26.91
Orissa 67.28 49.72 48.01 55.62 41.64 42.83
Punjab 28.21 11.95 6.35 27.96 11.35 5.75
Rajasthan 44.76 26.46 13.74 52.13 30.49 19.85
Tamil Nadu 57.43 32.48 20.55 49.4 39.77 22.11
Uttar Pradesh 56.53 42.28 31.22 60.09 35.39 30.89
West Bengal 73.16 40.8 31.85 34.67 22.41 14.86
All India 56.44 37.27 27.09 49.01 32.36 23.62

Source: Planning Commission, Government of India

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Policy Implications:

Past studies which identified factors like lagging infrastructure development,

low quality of governance etc. Naturally, recommended for their improvement. I have
tried to explain the economic performance of southern states in terms of institutional
reforms which produced positive impact on growth performance of southern states over a
long period of time.While it is necessary to continue to make concerted efforts to
promote infrastructure development and improve quality of governance, it is also
necessary to pay some attention to social reforms which go to achieve inclusive
development.

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